Story Highlights

Ruidoso officials hope they won’t have to issue bonds to pay for replacement of eight bridges damaged in a 2008 flood on the Rio Ruidoso. For years, they’ve been wading through mounds of regulations in anticipation of help from the Federal Emergency Management Agency as costs escalated. But now they face an edict to show progress or possibly lose those federal dollars.

“In reviewing the outstanding FEMA bridge projects, the village has determined that there is a gap in funding between actual bridge replacement costs and the amount that has been awarded by FEMA on project worksheets,” Village Finance Director Judy Starkovich wrote in a memorandum to the village council. “Zia Engineering has submitted preliminary construction estimates and the gap is about $9,592,593.”

The village has begun the process to adjust the project worksheets to the estimated construction costs, a process called reversioning, she wrote and repeated in the council meeting.

“However, the village is waiting for confirmation that New Mexico Homeland Security and Emergency Management and FEMA will approve the reversioning of the bridges” and increase the available dollars for the bridge projects, she said. That could take 60-days, she said.

After a lengthy discussion, councilors followed the recommendation of Starkovich and Village Manager Debi Lee and adopted a non-binding resolution declaring the intent of the council to consider for adoption an ordinance authorizing the issuance and sale of gross receipt tax improvement revenue bonds to repair the bridges. No amount was specified.

“We’ve made progress with FEMA and we’re in the process of working out outstanding issues,” Starkovich said. The village still must replace eight bridges and some sewer lines.

“We have to complete the bridges, if want to be eligible for any future funding in a disaster,” she said. “We’ve been exploring how to finance (the projects to cover the gap if FEMA won’t budge or to pay only for the village’s 7 percent share) with our financial advisor and bond counsel.” She recommended holding off adoption of any ordinance until the village has gone through the FEMA process, “because once we issue (bonds), there will be interest connected to any debt.”

Chris Muirhead of Modrall Sperling law firm and George Williford of Hilltop Securities emphasized the resolution adoption has no binding effect, but shows intent and gives their firms direction to move forward to prepare potential financial options.

Lee said she spoke moments before the meeting with New Mexico Homeland Security and Emergency Management Cabinet Secretary M. Jay Mitchell.

“They are putting us on a tight rope,” she said. “They want to see progress in two years. We can’t build eight bridges in two years, not in our climate. It’s not realistic to think we could build eight bridges in two years when it took one year just to get plans OK’ed on one bridge before we could build.

“The reasoning (by FEMA) was that there have been so many disasters in this region and Louisiana that they are looking for money and want to de-authorize us and give it to other states. There are many other (entities) with eight year out because it is so bureaucratic dealing with FEMA. A $2 million to $3 million (price tag) is a more realistic cost per bridge. There’s a lot of work to satisfy FEMA. (Mitchell) suggested we improve our relationship with the regional offices.”

The village can’t cover the cost upfront and then wait years to be reimbursed, she said.

Councilor Tom Battin said 10 years has passed since the flood and the estimate of $150,000 is out of date in part because the village has been waiting for FEMA to appropriate the money. He called the situation “frightening,” and contended the delays haven’t come from the village side. But Congress may take over responsibility directly, and reprioritized FEMA dollars, he said.

“If we have to compete with Puerto Rico, we’re in big trouble,” he said. “I think Secretary Mitchell is a friend and wants to help, but we need to engage with him and try to get established, or the whole program could get away from us.”

“That’s why we want to take steps today to show we are willing,” Lee said. “They want to see progress in the next two years on the bridges and see it on the sewer lines.”

She’s also worried because flooding occurred in 2006 and again in 2008, Lee said, adding “I think it’s about due.”

One of the reasons the village has managed the last 10 years is that temporary bridges were installed.